Mastercard and off-grid solar firm M-KOPA have announced a partnership at the Mobile World Congress – MWC to pilot a new payment technology to support pay-as-you-go (PAYG) solar opportunities in Uganda, with plans to roll out across East Africa.
M-KOPA provides affordable, safe and clean energy to 3 million people in East Africa, will pilot Mastercard’s Quick Response (QR) payment technology in Uganda to extend the reach of its pioneering pay-as-you-go solar program.
According to official communications, Mastercard will create a new payment channel for M-KOPA’s pay-as-you-go customers outside of Kenya. The network of mobile network operators and banks using Masterpass QR will help M-KOPA to scale and grow across Africa without requiring additional technology investments. Masterpass QR is currently available in Ghana, Kenya, Nigeria, Rwanda, Tanzania and Uganda.
Solar is an independent way for people to power homes and businesses but requires a large, one-time investment. With pay-as-you-go financing, M-KOPA customers purchase a solar home system on credit and make small daily payments using mobile money for less than what they previously spent on hazardous, kerosene lamps. Customers will now be able to make daily payments or top up the solar accounts easily by either scanning a Quick Response (QR) code from their smartphone or by entering the merchant ID associated with the QR code into their feature phone.
After making successive payments towards their solar system for roughly a year, customers build creditworthiness and can purchase other products, such solar-powered televisions, energy-efficient cookstoves and smartphones on a similar payment scheme.
“We’ve proven that the pay-as-you-go solar model works in East Africa, but the off-grid market in Africa is tremendous. Our partnership with Mastercard provides the roadway for more solar services and infrastructure across the continent,” said Nick Hughes, co-founder and chief product officer, M-KOPA Solar. “QR technology holds great opportunity to extend the range of payment channels for customers and represents a step-change in our mutual goal to light up homes and businesses in Africa.”
Following a successful pilot, Mastercard and M-KOPA plan to extend the program across East Africa. Mastercard will also work with mobile network operators to extend this model to other utilities like water and gas in developing markets across the world. This digital service innovation will open up new business opportunities for telecommunication companies and mobile network operators and evolve their business model beyond providing airtime and data services.